Question

Am I doing this regression problem wrongly?? Please help! Thank you!

Florida condominiums are popular winter retreats for many North Americans. In recent years, the prices have steadily increased. A real estate agent wanted to know why prices of similar-sized apartments in the same building vary. A possible answer lies in the floor. It may be that the higher the floor, the greater the sale prices of the apartment. He recorded the price (in $1,000s) of 1,200 sq.ft. condominiums in several buildings in the same location that have sold recently and the floor number of the condominium.
a. Determine the regression line.
b. What do the coefficients tell you about the relationship between the two variables?
((The data is given in excel but I can't share the excel file here))

I tried to do this myself and got the following data and graph. However, the correlation I calculated is larger than 1, which is not possible?? and I'm not sure if I do this correctly. Please correct me and teach me the correct way to solve this. Thank you so so much!!

Answer 1

The correlation coefficient will be around `0.51`.

Explanation:

The correlation coefficient `r` follows the formula
`r=σ_(xy)/(sigma_xsigma_y)`, where
`σ_(xy)`: covariance
`sigma_x`: standard deviation of `x`
`sigma_y`: standard deviation of `y`

From your data, the correlation coefficient is
`r=85.1944/(7.624802*22.05637)=0.50658…`.